Fuel Prices Surge As Ceasefire Talks Stall And Supply Disruptions Rattle Markets

Energy prices are spiking this morning after what was expected to be an update on ceasefire talks last night turned into more of the same from the White House during its 20-minute public address. Diesel futures are leading the way, jumping 50 cents in pre-market trading, while gasoline lags behind with ‘only’ 20 cent gains.

Colonial Pipeline announced it had shut Line 1 (the main gasoline artery running from Houston to Greensboro) for repairs yesterday afternoon, with no guidance on how long they anticipated the downtime to last. Not long, apparently, as it returned to regular operations later Wednesday evening.

RIN prices are continuing to jump this week following the release of the final RFS standard for 2026 and 2027 late last week. D6 and D3 RINs (ethanol and bio-based diesel, respectively) traded yesterday at levels not seen since December of 2022, which is great news for renewable companies that struggled with low credit prices last year.

Notes on the DOE report:

Crude stocks added about 5.5 million barrels despite an uptick in demand, while the first 378k of the planned 172-million-barrel release from the US SPR showed up in last week’s stats. Thirty-two other IEA member nations also plan to release a collective 400 million barrels from their reserves in an effort to help stabilize supply shortages and their effects on oil prices resulting from the ongoing Middle East conflict.

Refinery runs declined on the week with PADDs 2 & 4 dropping to join PADD 5 at below average rates. However, PADDs 1 & 3 remain quite high, holding the total US well above the high end of its 5-year range. The bulk of the drop came out of PADD 2 in what looks to be the rest of Marathon’s planned sequential multi-unit shutdown at their Robinson, IL refinery, expected to be offline until May. The PADD 5 drop corresponds to one of a few units shutting down for planned maintenance at BP’s Cherry Point, WA facility. Marathon Carson also went down last Wednesday citing mechanical issues on crude and vacuum units, so PADD 5’s already low run rates will likely decline further in the coming weeks.

Diesel stocks slid everywhere except PADD 1 with increased exports and demand. All PADDs outside of 3 and 4 are running at below average rates with PADD 5 sinking to yearly lows, even with the inclusion of RD. PADD 5 renewable stocks kicked off 2026 below the last two years; however, record-high levels in PADD 3 drove total US RD inventories to an all-time high.

Gasoline stocks are down slightly despite lowered demand but remain well above recent years. PADD 1C is responsible for the large decline in PADD 1, although levels there are still holding above average in total. PADD 2 also dropped quite a bit but remains above its 5-year range as we move into the seasonal springtime draw on inventories. PADD 3 has been on a steady decline since the second week of the year but bounced back above its 5-year range last week, while PADDs 4 & 5 saw much softer changes. In total, US gas stocks remain at seasonal highs as they have for most of the year.